Indian Overseas Bank hopes to meet 15% bulk deposit norm
Mumbai: Public sector Indian Overseas Bank (IOB) on Thursday said it is hopeful of reducing its bulk deposit level out of the total deposit to the mandated level of 15 percent by end of the current fiscal.
This would provide space for increase in the Chennai- based lender's net interest margin (NIM) in the fourth quarter of FY13, a top official said.
"We are hopeful of reducing the bulk deposit to 15 percent by end of the fiscal from more than 30 percent last fiscal," IOB Executive Director A K Bansal said here.
He said the declining bulk deposit rates will also supplement the bank's NIM. "Rates of high cost deposits have fallen from a high of 11 percent in March last year to around 9.6-9.7 percent level now, which will support margin."
Bansal said the bank would reprice the bulk deposits, which will come for maturity in the near future.
The bank had earlier said its NIM would be around 2.8 percent in the fourth quarter.
Last year, the Finance Ministry has directed the public sector banks to reduce their bulk deposits to 15 percent of the total deposits by end of this fiscal to improve their profitability and for sound asset-liability management.
On the impact of repo rate reduction in the March 19 mid-quarter policy review meet, Bansal said the bank would take a call on rates taking into account the deposit mobilisation environment.